Skip to main content

Credit Unions

Volume 461: debated on Thursday 21 June 2007

There are currently over 2.6 million Child Trust Fund accounts open of which around three-quarters have been actively opened by parents. The Government are committed to ensuring that all families, including lower income families, get the most from the scheme.

The Government believe that credit unions have an important role to play in delivering the Child Trust Fund. Credit unions offer a community-based alternative for people who may lack financial confidence, and be initially wary of large, commercial banks and building societies.

Where credit unions serve communities in low-income areas, they can be vital in targeting those encountering exclusion from mainstream financial services, helping clients obtain money advice in the course of providing a loan, and connecting people to other mainstream opportunities. The Government hope that credit unions will take full advantage of the opportunities offered by the Child Trust Fund to build on this success.

Child Trust Fund rules allow credit unions to offer both cash and Stakeholder accounts. The Government are encouraged that several credit unions have already chosen to provide these accounts: Leeds City Credit Union, Clwyd Coast Credit Union, Leicester Credit Union, Dragonsavers, Loans and Savings Abertawe and Bristol Credit Union, and are keen to see more do so in the future.

All MPs with credit unions in their Constituencies have a role to play in encouraging their participation in the Child Trust Fund scheme so that we can achieve our goal of giving every child the best start in life. Credit unions interested in becoming a provider can find more information at http://www.hmrc.gov.uk/ctf/providers.htm.